AMP’s contemporary wealth protection business operating earnings dropped 11% to $138 million for the 12 months ending December 31, 2010.

The company has attributed the fall to higher income protection and group life insurance claims.

Individual life insurance premiums for the year were $662 million, up 7.5% on the previous year.

The rise in sales of individual life insurance premiums was due to a 30% rise of business through independent financial advisers.

This is as a result of forming a specialist team in 2009 to concentrate in boosting life insurance sales through these advisers.

Despite increased sales in AMP’s individual life insurance business, policy lapse rates increased by 0.3% to 11.4% during the year.

This was attributed to a number of policyholders moving towards retirement and cancelling their insurance policies.

AMP’s group risk life insurance premiums were flat at $146 million for the 2010 year.

The average result for group life insurance business was due to increased competition in the segment and the loss of two corporate superannuation plans in the early part of last year.

The closed life insurance businesses reported a 7% drop in operating earnings to $140 million reflecting the run-off nature of the business.

At the end of the year the business was worth $17.3 billion, compared to $18.1 billion as at December 31, 2009.

In NZ profit margins on the life insurance business fell by $7 million as a result of increased risk lapse rates and a $3 million impact on the profit share arrangement between AMP and its general insurance product provider following the Christchurch earthquake.

CEO Craig Dunn says the company responded positively during 2010 to the changing consumer and regulatory environment.

“Our continued investment in growth opportunities through the economic cycle has paid dividends,” he said.

This growth will be boosted by the merger of Axa Asia Pacific Holdings’ Australian and NZ businesses with AMP.

“The planning for the proposed merger with Axa is on track and we are looking forward to creating a new competitive force in financial services,” Mr Dunn said.

The merged company will become the leading independent wealth management company in Australian and NZ, with a broader distribution footprint with growing distribution through independent advisers, he says.

AMP is currently seeking government and regulatory approvals for the merger before an Axa shareholder meeting on March 2.